The part of the jobs recovery no one is talking about

Sometimes, when you work in the world of manufacturing, it can feel like you are living in a world that speaks its own language. This can be particularly true when you talk to companies in the machine tool industry, where conversations about boring machines, worm grinders, and robots are commonplace. However, keeping the pulse of this segment of America’s industrial world also offers a unique vantage point on all of the conversations revolving around jobs recovery in the United States.

To frame this conversation, reflect back on something President Obama said during last week’s Presidential debate. He said his economic plan was based on what Bill Clinton did during the 90s, and in the 90s we saw the creation of millions of new jobs. On the surface, this may seem like a common sense approach. If it worked before, it should work again. But consider everything that has changed since the 1990s. If you are not in the manufacturing world, you still know that social media has become a major force that was not around in those days. A single twitter account dedicated to customer service can assist people faster and more efficiently than a couple of people working in a call center, for example.

But then think about all of the advances that have happened outside of the realm of communication. Consider all of the automation that factories have adopted over the last few years. Touching a few buttons on a CNC controller can now program a machine to complete multiple operations automatically where part production used to require one or more people. A robot can load heavy metal tubes onto a conveyor belt (or unload them) faster than a person can and without the risk of injury. Thus, as manufacturing gets more and more automated, the number of manufacturing jobs is never going to return to what it was, even in a more robust recovery.

This is not to say that manufacturing has no need for humans anymore. As production at a factory increases you still need more people to assemble parts and machines. But increasingly, automation is taking the manufacturing world, and other industries, by storm.

What this means is that aiming for a jobs number from the 1990s may not be realistic. Expectations are lagging behind the new reality. Until economists and political leaders adjust objectives to adhere to the new world in which we live and work, jobs reports are likely to remain highly disappointing. This creates an endless cycle of disappointing reports, a bad day on the stock market, and more ripple effects that affect the rest of the economy.

What are you experiencing in your own world when it comes to jobs? Is your grocery store, like mine, now populated by more self-checkout counters than actual cashiers? Has your bank reduced the number of tellers they have on staff? Is your cable company using automated customer service? How is this new reality affecting your own life, and what do you think we can do to create more jobs in this new world?

19 comments on “The part of the jobs recovery no one is talking about”

I appreciate this post for making people think differently. The global platform we’re now playing on has altered life as we knew it, as well. Our stock market is subject the rise and fall of Japan and Europe. The oil companies dictate pricing wars and Mother Nature is certainly telling us that water is a commodity. The food giants are changing food manufacturing with more chemicals and people are afraid to enter the hospital or get a shot for fear of lasting illness. And, forget about all the bacteria in our foodstuffs.

Margie, it’s a horrid time, and one president is consistently getting blamed for all the world’s woes. No matter if he’s a she, black, white, yellow, elephant or donkey — why, all of a sudden, is everything the blame of one man when the world is the influence?

That’s a fantastic point about the new global economy – this post was *just* concentrating on the jobs recovery but economically there are countless factors that we didn’t have to deal with in the past.

These are definitely horrid times, and I don’t want to make it seem like recovery is impossible, but the times have changed. I’m not sure we can get back to where we were 15 years ago, and in many ways we might not want to. But that means our measuring sticks need to change too.

Entrepreneurship! We have got to encourage people to stop looking to others, including the government, for their paychecks and start looking to their own God-given gifts, talents and passions. We need to spot the talents our children and teens have and encourage them to turn those talents into their own businesses. For example: Johnny loves dogs? Start a dog-walking business, a mobile dog-grooming business, a dog poop-picker-upper business, etc.. Not every kid who loves animals is cut out to be a vet, yet that’s right where we always point them, isn’t it?

In the same way, we need to encourage our unemployed and underemployed friends to do the same. We have to teach Americans to stop thinking like EMPLOYEES and start thinking like the SELF-EMPLOYED. From there, folks can — if they want to — hire either employees or other independent contractors (the self-employed).

This isn’t a new idea — there was a time in this country’s history when entrepreneurs came to America for the freedom to start their own enterprises! And immigrants have ALWAYS come to America to start their own businesses or work for others who own THEIR own businesses, usually sending their profits home to their families, who haven’t yet arrived on our shores.

With the social media marketing prowess we all have, we should be encouraging people and teaching them how to use social media to get buzz for their own little enterprises. Almost every business owner I know, including Scott and I, started small, on a shoestring, with nothing much except the desire to have the freedom to work for ourselves and be the master of our own destinies. SCORE mentors are everywhere, eager to help folks get a business up and running. http://www.score.org/

The world has changed, as you’ve pointed out, Margie. But there’s not a person I know who doesn’t have skills and talents they can turn into profits if they become their own boss. Those of us who have DONE it have to encourage those who haven’t, especially those who think starting a business is “too ____” (fill in the blank).

Well, I don’t know. That’s one of those theories that sounds really good, and it even sounds really easy, but I’m just not sure how attainable it is for a lot of people who would need it most. Without going into incredible amounts of debt, I certainly wouldn’t be able to start a business myself right now (not that I’d want to). Then there is the mess with the healthcare system. If you work for yourself what happens to your tax bracket, your healthcare coverage, and all that jazz?

As with many things, there are pros and cons. You certainly have more control when you run your own business, but you also bear the brunt for all of that business and all of your life. And indeed, your life becomes that business. For some people, that’s a line they just don’t want to cross for whatever reason. I’m not sure it’s always a mindset thing. Sometimes there’s just legitimate question as to whether something is feasible. You know?

Margie,
Plano, Texas, my former home is where one can get used to excellence as the norm. It’s home to many corporate HQs, JCPenney, EDS, FritoLay just to name a few, and largely on the surface seems unaffected by today’s economic woes. Exit stage left to when I moved to farm country in Illinois. From my observations the little towns of America are turning into the dead and dying. It’s tragic to see the suffering across the nation in small town America where small businesses have just boarded up. I don’t know how to begin to answer where have all the jobs and potential for jobs gone. But one thing is for sure about your post, when companies have essentially done away with all human interaction and hiring people to work for them it may be good for their bottom line but eventually who will have a job to buy their stuff?

That’s so interesting. It’s true, there are parts of the country that are continuing to grow. There are cities that are continuing to refine themselves and spread out. Then you go to other places and you can see the depression or recession or whatever you want to call it. And it’s a stark, stark contrast.

It’s called the rise of the rest…Zakaria coined it. The developing countries called and they want their resources back. For generations we’ve subsidized the American dream on the back of cheap labor and resources….and the party is over.

We need to re calibrate our measuring sticks because our definition of success is ungainly and unhealthy.

But it won’t happen until we start putting the needs of others above our petty wants…sad really. Someone is going to read that last statement and shout “communism!”

Vincent, you’d love the Social Entrepreneurship model. Social entrepreneurs are simply entrepreneurs using their gifts and talents to do good.

There’s a company making really inexpensive hand-cranked laptops for kids in developing countries. Or how about the guy who’s building portable shelters for the homeless (EDAR – Everyone Deserves a Roof)? A friend of mine has a heart for senior citizens in nursing homes, and is taking her audiology skills “on the road,” going to the residents themselves. A musician friend of mine performs in nursing homes and children’s hospitals.

Many wealthy CEOs are using their profits to invest in businesses and people who are doing good. It’s called “Impact Investing,” and the rewards are more altruistic than financial. See Entrepreneur’s article at http://www.entrepreneur.com/article/223496 for more info.

Absolutely, Michelle. I love the concept and we try to support such endeavors whenever possible. luminaidlab.com was our most recent.

And I’m all about Altruism. Truly live it. Ask anyone around me.

But I know my altruism puts little ole’ me at a disadvantage. Game Theory (ala Rand Corp) shows again and again that dishonest people achieve a better outcome when dealing with honest people. People who abuse the system get more from it than the people contributing to said system. They steal.

And when they steal, they gain more power and that power gives them the ability to bend the rules towards their favor.

Now I’m cool with my decision. Outside of being a good husband and father, I have close to zero ambition. I don’t want millions. I don’t want a bigger house. I want my car to push past 250k.

I think the secret is “targeted altruism” for people like me. If I was uber rich, I could afford a % of my efforts and funds getting abused and I could be altruistic across the board. But for me, I need to be careful and place my faith and love in people I know will either pay it back or pay it forward.

There’s that too. We can no longer think of China as that nice little scary country that makes things on the cheap for us. They’ve gotten powerful and boy do we owe them a lot of money. Not a great situation to be in. And as their relationship with Japan continues to get more unsteady, we’re going to find that we need to become much more aware of the geo-political climate allllll around the world.

While unemployment is high, unemployment among college educated workers is less than 4%. Skilled workers are still at a premium — unskilled workers, many of whom where employed in the housing/construction boom, are out of work. They need to be retrained to work in manufacturing, or tech. I have manufacturing clients who are starving for _experienced_ set-up help, people who know how to run a machine. But there was such a construction boom over the last 20 years that those people don’t exist.

Marjorie,
A recurring fallacy that politicians and others rely on, is that there is a finite number of jobs at any given time. There used to be X number of jobs, but now there are only Y number of jobs. But the number of jobs is always theoretically infinite. Government policies that prevent people from contracting with each other at mutually agreeable rates destroy jobs, as do monopolies including labor unions, and other anti-market forces.

The cry that new technology destroys jobs has been heard since the dawn of the industrial age. Yet a more efficient economy put laid-off buggy whip makers and telephone operators back to work in better jobs. The goal of “creating jobs” is a sure way to destroy jobs. Jobs are a side effect of the goal of satisfying customers in pursuit of profit. When that is allowed to take place, there are plenty of jobs.

I see your point, *but* the fact is that I think economists are basing a lot of their numbers on a world that no longer exists. Maybe there are different kinds of jobs, so we should be monitoring different types of things. You know what I mean?

Marjorie,
“different kinds of jobs,” yes; “a jobs number from the 1990s [that] may not be realistic,” no.

The marketplace sorts these things out over time – if allowed to. It’s a bad idea to let politicians to insert their monkey wrenches all over the market machine (punitive taxes for some, subsidies for others, wealth destruction and micromanagement for all), and then let them claim that the machine’s reduced efficiency is just “the new normal.”

Those who advocate central planning should have its inevitable failure hung around their neck.

You’re entirely right that there will be fewer manufacturing jobs than in the 90s…and perhaps fewer call centre jobs. But this doesn’t mean we need to adjust to lower employment overall.

Many industries have become automated in the past – agriculture, transport, previous generations of heavy industry; in fact probably every industry ever now uses tools to do some or most of the work previously done by people. For over 100 years you haven’t (at least in the US) see people manually ploughing fields, pulling stacks of goods by horse and cart, or forging metal objects with a furnace and anvil. Yet in the 90s far more people in the US were employed than at any time in history.

Instead of those old industries, people got jobs doing new things, and demand arose for the new things they did. Nobody in 1900 had a full-time job providing psychotherapy, reflexology, or management consulting – not because the technology hadn’t been invented, but because people were too busy farming and building cars for the demand for those services to match the supply. Now that people have been freed up from those onerous tasks, they spend their time providing those more abstract services to each other.

Inventing those new services doesn’t happen overnight – this is one of the reasons that automation can indeed lead to short-term unemployment in certain areas – but it always happens.

It’s easy to assume that a loss of jobs in one particular field, or several, will translate into a general reduction in employment. But history shows that that is never really what happens.

You are 100% correct, but my fear is that I’m not really seeing a lot of efforts to connect people who need jobs to job openings. For example, a lot of my friends have doctorates and could teach college-level classes, but there are so many tenured professors because people are working longer and living longer that a lot of my friends can’t find teaching jobs. That’s a new reality. Cars and agriculture are things we have relied on for the last century, but they are no longer new. We need some new frontier. Otherwise, it seems to me, we are living in the past.

[…] is still far from healed. Too many people still are without jobs, and as we have discussed before, the business world itself is changing dramatically. All we can know is the reality we’re in now, and that reality is marked by a lack of […]